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South Asia Investor Review is focused on reporting, analyzing and discussing the economy and the financial markets of countries in South Asia, including Pakistan, Bangladesh and Sri Lanka. For investors looking to invest in emerging markets beyond BRIC countries (Brazil, Russia, India and China), this blog is designed to help international investors looking to learn about investing in South Asia with focus on Pakistan. Riaz has another blog called Haq's Musings at http://www.riazhaq.com

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Media reports from Pakistan often portray a picture of doom and gloom, with the IMF bailout of the economy, terrorist training camps, Islamic radicals, horrible governance, and corrupt and inept politicians making the headlines around the world. The adjective of "failed state" is often used to describe Pakistan. Is there more to the story than the big headlines? Is there hope for Pakistanis amidst the doom and gloom? On Quaid-e-Azam M.A. Jinnah's 132nd birthday today, I think there is. The telecommunication, information technology, higher education, media and the middle class progress started during Musharraf-Aziz years continues to have its impact on the country founded by the Quaid-e-Azam more the 61 years ago. Here are a few things I found posted by a fellow blogger on Tech Lahore blog:

1. Pakistan is the most connected country in South Asia, with the highest teledensity. The Internet penetration in Pakistan is at 10% versus 5% in India, according to ITU.2. Pakistan’s …

America's killer drones are getting all the attention, in the fight against Pakistani militants. But Pakistan's military has plenty of unmanned aerial vehicles, or UAVs, too. And they're being used to spy on suspected insurgents, and listen in on their phone calls.

"Al-Qaida and Taliban fighters use not just mobile and satellite phones for communication, but also sophisticated military radios," Defense News notes. So companies like East West Infiniti are building SIGINT [signals intelligence] for small drones and robotic blimps, to capture those conversations. Designed for militaries unable to afford high-end, dedicated SIGINT platforms, East West's Whisper Watch system can detect and monitor electronic emissions up to 250 kilometers away and then retransmit to a g…

Internet and telephone traffic between Europe and the Middle East and Asia has been seriously disrupted since Friday when three major underwater data lines were cut in the Mediterranean, according to media reports.

The main damage is to the four submarine cables running across the Mediterranean and through the Suez Canal. The damaged cables include Sea Me We 4 and Sea Me We 3 lines, which connect countries between Singapore and France as well as the Flag FEA cable route, which stretches from the U.K. to Japan, a France Telecom spokeswoman told Network World. A fault was also reported on the GO submarine cable 130km off Sicily.

France Telecom isn't sure what caused the cut, she said. "We have two assumptions. The first is that it could be an underwater earthquake," she said. "Or it could be simply a ship in the area which has cut the cable." The BBC says that some seismic activity was reported near Malta, where the break apparently occurred, shortly before the cu…

Monday's removal of an arbitrary floor of 9144 points on KSE-100 imposed Aug 27 has sent Karachi shares plunging 16.21% in the first four days of trading, with KSE-100 closing at 7,785.26 points on Thursday.

The government and the exchange had hoped to be able to put together a 20 billion rupee ($255 million) stabilization fund to support prices once the floor was removed. However, some participating institutions balked at putting money into a falling market. Also, the International Monetary Fund, which recently agreed to advance Pakistan $7.6 billion to help stabilize its economy, is against using government funds to bolster share prices, reports the Wall Street Journal.

"Foreign portfolio investors who may have faced a liquidity crunch due to global events will offload their holdings in Pakistan," said Farhan Mahmood, a research analyst at JS Global Securities.

The trading volume at KSE has surged more than 50 times since Monday to over 50 million share a day. It had b…

The International Monetary Fund (IMF) has approved a 23-month, US $7.6 billion loan to Pakistan in November to avert a severe current accounts deficit and Pakistan's debt default. On November 27, the IMF released to Islamabad a first installment of $3.1 billion, in it first "bailout" of an Asian country during the current world financial crisis.

Prior to this news, Pakistan's President Asif Ali Zardari knocked on many doors and begged unsuccessfully for billions of dollars in assistance for months from "Friends of Pakistan" (FOP), a group of countries including China, Saudi Arabia and the United States. This was part of an effort by Pakistan's new president to avoid going to the International Monetary Fund (IMF).

Why did the FOP decline to help? Why was Mr. Zardari trying to avoid an IMF bailout? Let's try and examine the answers to these two important questions being asked.

"India is not scared of the guns here in Kashmir -- it has a thousand times more guns. What it is scared of is people coming out in the streets, people seeing the power of nonviolent struggle," says the senior leader of the moderate wing of Kashmir's main separatist alliance, Hurriyat, and a key organizer of the civil disobedience campaign that began earlier this year, filling the air with chants of azadi. The number of armed attacks in the valley, meanwhile, has dropped to its lowest since the insurgency began in 1989, according to Indian officials.

How has India responded to the the peaceful movement for freedom in Kashmir? Not recognizing the reality of change on the ground, the Indian government has attempted to demonize the struggle as LeT led terrorism. Beyond that, it has continued to use force against unarmed, peaceful civilian protesters on the streets of Kashmir. Wall Street Journal reports the current situation in Kashmir as follows: Indian troops often resor…

Calls to "do a Lebanon" to fight terror are being made vociferously by the Indian media as they have focused the national and international attention on Mumbai terrorist attacks that targeted two opulent hotels and a small Jewish center in India's financial capital. The need for war on poverty and hunger has never succeeded in getting the kind of media spotlight in India that now shines on the urge to punish Pakistan for its alleged misdeeds in Mumbai. Meanwhile, the daily death and injury toll from widespread hunger in India continues to be much higher than the tragic results of the murder and mayhem in Mumbai.

Indian author Arundhati Roy recently brought attention to the tale of two Indias and India's real problems in an OpEd piece for the Guardian newspaper in the following words: "On a day when the newspapers were full of moving obituaries by beautiful people about the hotel rooms they had stayed in, the gourmet restaurants they loved (ironically one was cal…

When Barack Obama was elected president, Governor Blagojevich of Illinois saw opportunity in the vacancy created in the U.S. Senate. "I've got this thing and it's f------ golden, and uh, uh, I'm just not giving it up for f------ nothing," he allegedly said, according to U.S. Atty. Patrick Fitzgerald of Chicago. Fitzgerald has the governor's recorded conversations demanding $500,000 to a million dollars to sell the senate seat.

How ironic! The governor of a major American state that is sending its senator to the White House as president got charged with massive corruption on Dec 9, 2008, the day designated as International Anti-Corruption Day by the United Nations.

This latest corruption scandal in the United States confirms that corruption exists in all parts of the world to varying degrees, including the industrialized world. However, this report also illustrates that, unlike Pakistan and many other less developed countries, there is greater accountability …

Of the two recent studies making headlines this week, one brings good news and the other warns of grave risks.

The good news first: New research shows that in a social network, happiness spreads among people up to three degrees removed from one another. That means when you feel happy, a friend of a friend of a friend has a slightly higher likelihood of feeling happy too. And the more connected you are to happy people, the happier you feel.

"We get this chain reaction in happiness that I think increases the stakes in terms of us trying to shape our own moods to make sure we have a positive impact on people we know and love," explains Professor James Fowler, co-author of the study and professor of political science at the University of California in San Diego.

"We've known for some time that social relationships are the best predictor of human happiness, and this (latest study) shows that the effect is much more powerful than anyone realized," Daniel Gilbert, prof…

Hong Kong-based Political & Economic Risk Consultancy Ltd. has recently rated India as the riskiest of 14 Asian countries, not including Pakistan and Afghanistan, it analyzed for 2009. The Mumbai attacks are likely to worsen India's risk rating, especially if the attacks lead to hostilities with Pakistan and anti-Muslim riots in India. By targeting foreigners and the nation's commercial capital, the terrorists have struck at international links that have supported 9 percent average growth in the $1.3 trillion Indian economy for the past three years. The Mumbai events "couldn't happen at a worse time," Patrick Bennett, a strategist with Société Générale in Hong Kong, told the Wall Street Journal.

With the economic growth already slowing to a multi-year low rate of 7% and the national elections approaching in first half of 2009, these attacks have come at a particularly awkward time for the ruling Congress party. The opposition BJP's leader L.K. Advani has c…

While the Indian Navy is going after the pirates in the Gulf of Aden, two Indian youngsters are joining the Pirates in the United States.

Rinku Singh and Dinesh Patel are two 20-year-old pitchers with million dollar arms. Neither had picked up a baseball until earlier this year. Both have now signed free-agent contracts with the Pittsburgh Pirates, the prestigious five-times winners of the Major League Baseball World Series. They were the top finishers in “Million Dollar Arm,” an Indian reality TV show that searched for potential Major League Baseball talent in the country with millions playing cricket. They are believed to be the first athletes from India to sign professional sports contracts outside their country in a sport other than cricket. These contracts open up new and lucrative opportunities for South Asian cricketers beyond India's new cricket leagues.

The faster of the pair, Patel has clocked at 91-92 mph pitching speed, significantly slower than Pakistan's Shoaib A…

Will President-elect Barack Obama be allowed to keep his favorite Blackberry when he takes office on January 20, 2009? This question is being raised in Washington by those who see a conflict between the US law and the use of technology by a US president. The need to answer such a question did not arise because all of the US presidents to date have not been tech savvy. It is alleged that George W. Bush did have an email account prior to becoming president but he gave it up at the insistence of secret service. Pointing out the dangers of presidential isolation, Jonathan Alter of Newsweek puts it as follows: "Bush foolishly listened to the security people who made him give up his e-mail account in 2001. The result was that old friends suddenly found they had no way to get through to the president. More than a few watched in horror as he drove the country over the cliff."

Why the Conflict?Variously described as Barackberry or Crackberry, president-elect Obama is reportedly addict…

The pre-British, early 19th century Moghul India, described as caste-ridden, feudalistic and unmodern, was economically ahead of the rest of the world,including Britain and the US, according to S. Gururmurthy, a popular Indian columnist. The Indian economy contributed 19 per cent of the world GDP in 1830, and 18 per cent of global trade, when the share of Britain was 8 per cent in production and 9 per cent in trade, and that of US, 2 per cent in production and 1 per cent in trade. India had hundreds of thousands of village schools and had a functional literacy rate of over 30 per cent. In contrast, when the British left, India’s share of world production and trade declined to less than 1 per cent and its literacy was down to 17 per cent. And yet, in 1947, India had large Sterling reserves, no foreign debt, and Indians still had an effective presence in such trade centers as Singapore, Hong Kong, Penang, Rangoon and Colombo.

An Indian-American investor and producer of Bollywood movies has been convicted of mortgage fraud in the United States. How did he scam US banks and investors? How did US mortgage money end up funding Bollywood? To answer these questions, let's look at the broader story of US mortgage fraud and its impact on the international financial markets and the world economy.

The French stock market triggered worldwide shares selloff in August 2007 after BNP Paribas, the largest publicly traded bank in France, suspended investors’ ability to remove money from three funds that had invested in American mortgage securities. The bank said it had become temporarily unable to place a value on the funds, which have turned sour as increasing numbers of homeowners have defaulted on their loans.

The news came as a shock to many who mistakenly believed the damage from the US mortgage crisis was limited to the US financial markets. How did this happen? The answer lies in how the mortgage business has ch…

Technology will likely get significant attention by President-elect Barack H. Obama, in spite of the more urgent issues of two wars, a sputtering economy and ballooning US national debt. While there will be the usual rush by various special interest groups in the high tech world to try and influence US technology policy to favor their particular sectors or products, it is important for the new administration to see each technology in the broader context of national challenges such as government transparency, climate change, energy independence, delivering cost-effective healthcare broadly, and overcoming major national economic challenges.

Obama understands the difference that online networking technology made in raising record amount of $700m for his campaign, and energizing the young people to get involved as campaign organizers, workers and voters. It can be expected that Obama will continue to promote and use the online media to reach out to the American people and inspire them t…

The Bush administration has been the target of attacks by Democrats for the international financial crisis that began on Wall street earlier this year. The critics' main argument is that the Bush-era anti-regulation environment allowed unregulated derivatives contracts, called "weapons of mass destruction" by Warren Buffett, to grow into a mushroom cloud.

While it is true that the dramatic growth of derivative contracts such as credit default swaps happened on Republicans' watch, the fact is that the seeds of the current crisis were sown during Clinton years. It all began with an obscure but critical piece of federal legislation called the Commodity Futures Modernization Act of 2000. And the bill was a big favorite of the financial industry it would eventually help destroy.

It not only removed derivatives and credit default swaps from the purview of federal oversight (on page 262 of the legislation), Congress prohibited the state and local governments from enforcing ex…

I am the Founder and President of PakAlumni Worldwide, a global social network for Pakistanis, South Asians and their friends. I also served as Chairman of the NEDians Convention 2007. In addition to being a South Asia watcher, an investor, business consultant and avid follower of the world financial markets, I have more than 25 years experience in the hi-tech industry. I have been on the faculties of Rutgers University and NED Engineering University and cofounded two high-tech startups, Cautella, Inc. and DynArray Corp and managed multi-million dollar P&Ls. I am a pioneer of the PC and mobile businesses and I have held senior management positions in hardware and software development of Intel’s microprocessor product line from 8086 to Pentium processors. My experience includes senior roles in marketing, engineering and business management. I was recognized as “Person of the Year” by PC Magazine for my contribution to 80386 program. I have an MS degree in Electrical engineering from the New Jersey Institute of Technology.
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